The one with the internal stock market

During a meeting this morning I used the phrase (and I don’t know if I need to credit it) the internal stock market, to describe how people are perceived and how talent is managed within an organisation. The person I was meeting expressed some enthusiasm for the phrase and in the time since the meeting the idea has been turning over in my brain and here’s where I’ve got to so far…

Stocks are valued on a perception of future performance, based on cashflow projections derived from strategy validated by track record. Is this how we perceive employees and does this point to the perennial debate about performance vs. potential?

Companies present to the market on a regular basis their projections, strategy and review their track record.  Is this your performance review or the update to the board? Is this your chance to position your internal stock within the business?

Analysts crunch numbers and make recommendations. They provide the models to value the stock. They produce numbers and recommendations but eventually it’s investors who buy or sell. So are HR the analysts? Providing the model for the investors (the line management or business leadership) to make investment decisions?

Some investors are after long term value, some dabble and some are relatively small. Is this akin to support to develop potential or the need for quick performance to remain credible? Does the size of the investor align to the influence and power of whoever is rating you or sponsoring you?

According to the New York Stock Exchange a blue chip stock is a stock with a “reputation for quality, reliability and the ability to operate profitably in good times and bad”. Does this relate to those employees are just known to get it done. Whatever happens whatever the circumstances they just deliver? But will their value increase dramatically?

I haven’t finished thinking about this yet but thought the analogy may be improved by sharing it and challenging it. Also I am sure there’s something about bull & bear markets and where does organisational politics meet shorting stock?

Anyway, that’s as much as I’ve got so far….anyone else got anything?

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5 Comments

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5 responses to “The one with the internal stock market

  1. nice post, two comments…

    1. “Stocks are valued on a perception of future performance, based on cashflow projections derived from strategy validated by track record” – cashflow doesn’t come into most stock valuations…

    2. “So are HR the analysts?” – HR seem to be more like the Brokers. They’re the ones buying or dumping the stock. The analysts are elsewhere.

  2. Cheryl Clifford

    In the end all we are all tradeable units. You captured my opinion of individuals within any business – developing, interchangeable, replaceable and of varying benefit. A liberating concept, freeing us from the human instinct of attachment and making the ‘stuff’ far easier to stomach!

  3. What would happen if we did see people as tradeable assets? An investment with an expected return to be valued or sold to someone else who can spot a bargain or envisage a different future. Doesn’t sound very human or appealing and how would we motivate them to perform? The only reward for performance would become monetary… hmmm maybe that’s what many organisations actually do – they just can’t trade their staff yet…

    However I love the analogy even if it’s to prove what we shouldn’t be doing so here’s some more!

    Short-selling stock? Has to be internal politics.

    Bull market is probably when there is a bonus pool. Bear market probably means redundancies.

    HR? Probably more like the equities back-office. Driven to be highly cost efficient, working to fulfil orders T-2, dealing with contracts, reconciling & investigating failed trades. A necessary & valued function but the front-office isn’t that interested in their advice – just get it done for the lower cost.

    Some of HR is more like the middle office. Closer to the floor, providing advice, in the thick of it, often receiving front office gratitude. Their challenge is where next?

    Talent Management? More akin to a derivative trader perhaps? Sometimes the purpose is to hedge, sometimes it’s speculative, sometimes the motive is self-interest. Ooh controversial!!!

    Here’s the thing…. where L&D? In a stock market you don’t develop your asset. That’s someone else’s job – the company advisors, their PR, the market even.

    Perhaps it’s late on a Friday after a busy week and I need to stop!

  4. Pingback: The one with people in boxes | Masters or Bust

  5. Pingback: The one with the single version of the truth | Masters or Bust

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